Combination of fundamental and technical analysis signals! Time to sell!

13 april 2022 101
Elena_Berseneva
Elena_Berseneva

Listed among the best MarketCheese authors
1st in the segments "Indices", "US stocks" and "Metals"
2nd in the segment "Currencies"
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On the daily USDCAD chart, we observe how the pair is approaching the resistance level of 1.267, slightly below which the "bearish" candle pattern "hanging man" took shape yesterday. Despite the lack of obvious benefits of the pattern in forecasting the market, its appearance should not be ignored. After waiting for confirmation, the "hanging man" will gain great strength.


The Bollinger bands indicator also reports a possible imminent change in the direction of the USDCAD price movement to a downward one, because the quotes have almost reached the upper band of the indicator. And together with the negative values of the Accumulation/Distribution assistant oscillator, which also suggest a decrease in the pair, the appearance of a "Bollinger reversal" signal is likely in the near future.


From a fundamental point of view, Canada's economy looks much more attractive compared to the United States:




Plus, today at 17 o'clock Moscow time, data on the main interest rate of Canada will be updated. According to forecasts, it will be increased by 0.5%. If expectations are met and the rate is raised, Canada will become even more attractive for potential investors.




Let's take a closer look at the macrostatistics of countries and note that 9 out of 14 macrostatistics indicators are in favor of selling the USDCAD pair (4 indicators of the USA and 5 indicators of Canada).


As the study "Fundamental analysis as a filter of technical signals" showed, the profitability of the technical analysis signal "Bollinger reversal", supported by the 9th estimates of the macroeconomic background filter, is higher than the profitability of the "pure" technical signal.



Thus, there is a good opportunity to make money on the decline of the pair.





Variants of market entry in order of decreasing risk:


1. Sale USDCAD at the current price with a target Take Profit order at 1.248 and a protective Stop Loss order above 1.27.


2. Sale the pair after updating the data on the Canadian interest rate with the protective and target orders of option 1.


3. Sale USDCAD at the end of the formation of the "Bollinger reversal" signal, that is, at the opening of the next trading day after the closing price is above the upper Bollinger band. Target and protective orders are similar to option 1.




Warning!

Trading on financial markets implies high levels of risk and can lead to a loss of investment capital. The MarketCheese team isn’t responsible for the possible loss of Your investment funds.

Elena_Berseneva
Elena_Berseneva

Listed among the best MarketCheese authors
1st in the segments "Indices", "US stocks" and "Metals"
2nd in the segment "Currencies"
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